D.3. Phased Projects

Phased projects are allowable under HMGP, HMGP Post Fire, BRIC and FMA.

Phased projects are used when it is beyond the subapplicant’s technical and financial resources to provide the complete technical information required for a full eligibility or EHP review of a complex project. In this instance, the subapplicant can apply for assistance to develop a complete body of technical data, which may include conducting engineering or feasibility studies, preparing a Benefit-Cost Analysis (BCA), or providing documentation for an EHP review. These products are referred to as the Phase I deliverables.

The Phase I deliverables provide FEMA with a technical body of information that is mutually agreed on by the subapplicant, the applicant and FEMA to determine project eligibility. If the results of the Phase I deliverables indicate the project meets HMGP, HMGP Post Fire, BRIC or FMA requirements, the project would then be eligible for construction assistance under a Phase II approval. Phase I assistance is part of the project’s total estimated cost and is subject to HMGP, HMGP Post Fire, BRIC or FMA cost-share requirements.

The use of a phased approach should be limited to complex projects that require technical or EHP data beyond the scope of what is generally required for a typical project. Phased projects are used when a subapplicant has a preliminary plan or concept where FEMA can make an initial eligibility determination. The preliminary plan or concept provides a guideline that the subapplicant can use to develop cost estimates and final construction plans and other required analysis to determine eligibility (such as BCA and EHP) before moving forward to Phase II construction. Both Phase I and Phase II are intended to be completed within the award period of performance. FEMA may use the pre-screening process to collect data needed to determine the eligibility of the project before committing additional funding for project design.

All applicants and subapplicants must follow the requirements under the procurement regulations.^[53] If applicants and subapplicants propose to use contract support for subapplication development and/or design and construction phases, they should review procurement and conflict of interest regulations to ensure they can comply with those requirements. More information about procurement can be found in Part 4.

The purpose of the pre-screening process is to ensure that the Phase I scope of work is enough to allow FEMA to review the project and determine eligibility and meet other program requirements.

The recipient must submit a subapplication, using the project specific information in Part 12, that provides all available preliminary design and site data. While a phased project may not have all the required information, the scope of work must address how any gaps will be addressed in Phase I. The applicant and subapplicant must select the appropriate project code for the Phase I deliverables within the electronic application system for proper project tracking.

The project must meet the following pre-screening criteria for a conditional Phase I approval to verify they meet the following criteria:

• Hazard mitigation plan: The proposed project must be in conformance with the mitigation plan.
• Justification for selection of the proposed project: Justification must be provided for the selection of the proposed solution after consideration of a range of options. Minimum criteria for a solution should include:
  • Analysis on why the selected approach was selected and at least two alternative proposals and why they were not selected.
  • Performance based criteria establishing the level of protection for the long-term solution along with the anticipated remaining risk after the proposed project is complete.
  • List of missing technical data to be collected and developed during Phase I, including a vulnerability assessment, engineering practices, established codes, standards, modeling techniques and best practices to which the design will conform.
  • Proposed conceptual drawings or design.
  • List of minimum deliverables and milestones to be completed during Phase I.
• Scope of work: The scope of work must identify the steps and deliverables needed to complete Phase I and preliminary actions to complete Phase II. Based on the pre-screening review, FEMA may use the Request for Information procedures to adjust the scope of work to ensure all program requirements can be addressed. The Phase II scope of work can be adjusted as part of the Phase II approval process.
• Budget: A detailed budget must be included in the subapplication. The estimated costs within this budget must identify all line items associated with the Phase I deliverables and an estimate for the Phase II costs. The Phase II estimate can be adjusted based on the findings of the Phase I deliverables through the budget amendment process.
• Potential schedule and milestones: The project demonstrates that it can likely be completed within the period of performance allowed by the program.
• Potential cost-effectiveness: The project must demonstrate potential cost-effectiveness based on a preliminary assessment of anticipated project benefits and cost. The subapplicant must be aware that this preliminary assessment is solely for the purpose of the Phase I pre-screening process and is not the final cost-effectiveness determination. A preliminary BCA is required at the time of subapplication. This must be based on feasible assumptions and available data regarding risk and must be determined by using the latest version of the BCA Toolkit.
• Other relevant technical data: The subapplicant must provide available data, including hydrologic and hydraulic data, based on existing models and other relevant technical data, as appropriate.
• EHP review: FEMA will complete an initial review and provide technical assistance to identify major EHP compliance issues and information needs. Additional EHP review by FEMA of the revised project design is required before Phase II approval. When a project is submitted for phased review and the Phase I scope of work is limited to developing engineering and architectural design plans, the Phase I review will likely meet a specified categorical exclusion (CATEX), which is a type of work categorically excluded from the National Environmental Policy Act^[54] review. If applicable, FEMA will document the CATEX to a proposed action in a Record of Environmental Consideration, which would record that the Phase I aligns with the scope of the specified CATEX and documents any extraordinary circumstances.^[55] Also, Phase I must comply with other EHP requirements such as Section 106 of the National Historic Preservation Act,^[56] Section 7 of the Endangered Species Act,^[57] and Executive Order (EO) 11988 on Floodplain Management (May 24, 1977) as amended by EO 13690 on Establishing a Federal Flood Risk Management Standard and a Process for Further Soliciting and Considering Stakeholder Input (Jan. 30, 2015), among others. FEMA will provide technical assistance during the Phase I review to identify any potential EHP compliance issues, specify any information that would be needed to conduct a Phase II review, and determine what level of National Environmental Policy Act review is applicable to the action.^[58] Applicants must address EHP requirements before construction can be funded. It is important for applicants to identify all data needs during the pre-screening process and update the Phase I scope of work to ensure they are completed.

If required, FEMA will use the Request for Information procedures to request adjustments to the subapplication Phase I scope of work, schedule and budget so that it includes all required elements to complete Phase I.

The applicant and FEMA may approve projects meeting the above pre-screening requirements for technical assistance under a Phase I conditional approval. FEMA and the applicant must coordinate closely to ensure mutual concurrence on all data and technical information as the Phase I technical review process proceeds. The sequence for the process is as follows:

• Other relevant technical data: If appropriate, the applicant and FEMA review the hydrologic and hydraulic or other technical data provided by the subapplicant.
• Preliminary engineering design: Based on the technical data, the subapplicant develops a preliminary engineering and design layout and budget with project-specific technical assistance from the applicant and FEMA.
• Compliance with EO 11988 as amended by EO 13690: If applicable, based on the technical data and revised engineering design, the subapplicant must demonstrate the project’s compliance with floodplain management requirements under EO 11988 on Floodplain Management (May 24, 1977), as amended by EO 13690 on Establishing a Federal Flood Risk Management Standard and a Process for Further Soliciting and Considering Stakeholder Input (Jan. 30, 2015). If a Flood Insurance Rate Map amendment or revision is necessary, the applicant and FEMA will provide the subapplicant with technical assistance to meet this requirement.
• Refinement of the cost-effectiveness assessment: Based on the revised design, budget and calculations made by the BCA Toolkit, the applicant and FEMA must refine the preliminary assessment of cost-effectiveness conducted prior to Phase I approval. This will result in a final benefit cost ratio to evaluate the project’s cost-effectiveness, which must include all the project costs, including Phase I. The BCA, developed through the BCA Toolkit, should be supported by available information including:
  • Risk information supporting the pre-mitigation losses (e.g., Flood Insurance Rate Maps/Flood Insurance Study, loss history, structural risk assessments).
  • Mitigation effectiveness information supporting the risk reduction (e.g., commitment to a design standard,^[58] level of protection [1% annual chance recurrence interval]).
  • Cost estimate for the anticipated project cost (including design costs) along with supporting assumptions.
• Key assumptions:The applicant describes the key assumptions, along with justification or rationale for these assumptions, regarding risk, project effectiveness and cost.
• EHP review: The applicant and FEMA must conduct a review of the revised project design to ensure EHP compliance. The project must meet EHP requirements before Phase II is approved.

After Phase I work has been completed and submitted to FEMA, FEMA will review the data to determine if the project remains eligible to move forward to Phase II. If the project does not meet eligibility requirements, FEMA will notify the recipient and proceed with closing out the subaward. Phase II funding will not be obligated.

If after reviewing the Phase I data, the recipient and subrecipient decide they do not want to complete Phase II, they must submit a change in budget request justifying their request to withdraw the project so they can closeout the award. For more information regarding budget and scope of work changes, refer to Part 8.F.

If FEMA determines the project to be eligible, technically feasible, cost-effective and compliant with EHP requirements under the Phase I technical review, FEMA may then approve the project for construction under Phase II.